Rupee weak against USD at 66.73; Fed rate hike looms

Mumbai :Extending its fall for the fourth straight session, the rupee depreciated by another four paise to close at 66.73 against the greenback on firm dollar demand from importers.

Highly bullish overseas sentiment in the face of impending Fed rate hike as well as sluggish domestic equities also impacted the currency market.

The Indian rupee resumed a tad lower at 66.70 per dollar compared to weekend closing level of 66.69 at the Interbank Foreign Exchange.

However, overcoming the initial volatility, the home currency recovered smartly in late morning trade to touch a high of 66.56 on the back of fresh dollar selling by banks and also supported by firming local stocks.

But, later the rupee fell back to hit a session low of 66.75 due to importer dollar demand before concluding at 66.73, showing a loss of 4 paise, or 0.06 per cent.

The rupee has declined by 24 paise in four days of losses. It plunged to more than two-year low of 67.01 briefly during last Friday’s intra-day trade.

In worldwide trade, the dollar continued to climb against the other major currencies after robust US jobs data fuelled further expectations for a December rate hike, boosting demand for the greenback.

Asian currency markets has become increasingly jittery on concerns over the possible impact reflecting the prospect of interest rate risks as the US central bank prepares for the December lift-off – first time in nearly a decade at its much-anticipated policy meet next week, a forex dealer said.

The dollar index, which tracks the world’s reserve currency against a basket of its peers, is up 0.59 per cent at 98.85.

Meanwhile, the stock market flagship index Sensex shed over 108 points, or 0.42 per cent to end at 25,530.11, extending its slide for the fourth consecutive day.